- Tornado Cash developers, founders, DAO members, and users are not subject to sanctions.
- Public opinion is divided on the sanctions imposed on the project.
The ideal mixing protocol, for Ethereum, Tornado Cash, has been sanctioned yet again. The United States Treasury Department said in a press statement today that it was updating its sanctions on Tornado Cash because the service had been used to provide North Korea with money, supplies, and technology.
The Treasury reclassified the project because it permitted criminal “cyber-enabled activity originating from… outside the United States.” Specifically, because the Lazarus Group used Tornado Cash in March to transfer $455 million in stolen cryptocurrencies.
Mixed Opinion From Community
The Treasury Department also blacklisted two people with ties to Air Koryo, the national airline of North Korea. While seemingly unrelated, both moves are a part of its larger strategy to cut off financial support for North Korea’s nuclear development.
The sanctions issued on Tornado Cash this summer have been nullified by today’s reclassification. As of right now, “The August 8, 2022 designation of Tornado Cash is no longer operative and is wholly replaced.”
According to the Treasury’s frequently asked questions section, as of the September update, Tornado Cash developers, founders, DAO members, and users are not subject to sanctions. Sanctions instead work to prohibit people from utilizing Tornado Cash by blacklisting the project’s cryptocurrency addresses and website.
Public opinion is divided on the sanctions imposed on the project, and there are movements afoot to overturn them. To that purpose, the Coin Center has sued the Treasury with funding from Coinbase. Tornado Cash is still active and has a total locked value of about $200 million. Authorities cannot intervene in coin mixer transactions directly since it is a decentralized application.
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